By Niv Elis
August 05, 2017
President Trump’s push to limit legal immigration has reopened the debate about whether rising immigration holds back wages for blue-collar workers.
The White House and two GOP senators who offered legislation this week to limit legal immigration, saying such action is necessary to protect the jobs and wages of Americans.
The legislation would curb the number of green cards each year and establish a “merit-based” points system for individuals who want to come into the country.
“For decades, the United States was operated and has operated a very low-skilled immigration system, issuing record numbers of Green Cards to low-wage immigrants. This policy has placed substantial pressure on American workers, taxpayers and community resources,” Trump said.
Sen. Tom Cotton (R-Ark.), one of the bill’s sponsors, said on MSNBC’s “Morning Joe” that the economic growth linked with immigration was, essentially, just going to the immigrants.
“There is no doubt that we could bring in 175 million Bangladeshis from Bangladesh and increase the size our economy. But would that really be good for us?” he said. “I would say it’s not. That’s why we need to focus not just on mere economic growth but on economic growth for households.”
Many economists dispute Trump’s assessment, arguing that new immigrants provide fuel to the economy.
One meta-study on immigration, released last year by the National Academies of Sciences, Engineering, and Medicine, put a variety of economists and demographers in one room to look for consensus on their research. While some things remained controversial among the panel, the experts found agreement in several areas.
Those experts broadly agreed that immigration improves the economy for the native population, even on the per-person level.
“There’s no disagreement. I don’t think you’ll find an economist or demographer that doesn’t think immigration increases the size of the pie going to natives,” said Rutgers Economics Professor Jennifer Hunt, a former Labor Department Chief Economist and one of the committee members that worked on the Academies’ report.
Overall, the study found that immigration had no negative effects on wages in the long run.
Another one of the Trump administration’s claims about legal immigration was namely that some groups fare worse than others.
“Among those hit the hardest in recent years have been immigrants and, very importantly, minority workers competing for jobs against brand-new arrivals. And it has not been fair to our people, to our citizens, to our workers,” Trump said.
The Academies’ report provides backing for that assessment.
“To the extent that negative wage effects are found, prior immigrants — who are often the closest substitutes for new immigrants — are most likely to experience them, followed by native-born high school dropouts, who share job qualifications similar to the large share of low-skilled workers among immigrants to the United States.”
In other words, the people most affected by new waves of immigration are people who came in previous waves of immigration.
Among the native population, high school dropouts, in particular, suffer from short-term wage loss as a result of low-skilled immigration, the study found.
But among high school dropouts, experts were unable to reach consensus about how much of an effect immigration had on wages, with some studies showing a negligible or zero effect.
One influential case study by Harvard economist George Borjas, which focused on the influx of Cuban migrants to Miami from the Mariel Boatlift in 1980, found that low-skilled wages dropped as much as 30 percent.
White House adviser Stephen Miller cited the Borjas paper when asked Thursday for data to support the administration’s proposed policies.
The paper has its critics, including Hunt.
“Because at that time, sample sizes in the data set were smaller, and because at that time you could not identify who was native born and who wasn’t, and because you were looking at one city, it’s difficult to know what happened in Miami,” she said.
When Borjas pared down his data to focus on the very specific group of non-Hispanic, male high school dropouts aged 25-59, he was left with only 17 people.
Borjas’s article was, itself, a rebuke to an older, 1990 study on the same event by David Card, which found no wage effects.
The Academies’ study provides partial backing to another controversial immigration claim the Trump administration makes: That immigrants cost the government money in welfare benefits. But there’s a major caveat.
Miller cited a study saying “that as much as $300 billion a year may be lost as a result of our current immigration system, in terms of folks drawing more public benefits than they’re paying in.”
The Academies’ study did find that immigrants are more costly than the native-born to state and local governments, in particular. That cost, however, is closer to $57 billion, the study found, and doesn’t take into account the long-term benefits to the economy of immigrant families.
“Immigrants’ children — the second generation — are among the strongest economic and fiscal contributors in the population,” the report found. The second generation ends up adding roughly $30 billion to government coffers, while the third generation creates a $223 billion surplus.
Overall, Hunt says that the idea of a merit-based immigration system is intriguing, and numerous other Western countries have implemented such systems. The most successful ones, she notes, are hybrid systems that give employers a big say in who comes in.
But she argued the Trump plan to halve the number of legal immigrants would make the US economy — and the voters who participate in it — worse off.
This report was updated at 1 p.m.
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